Will the Looted Just Shrug?

The statist reaction to Republican senator Jim Bunning’s temporary block of a welfare bill shows what the welfare state has done to the American people.

Everyone knows that federal spending is out of control. The feds are spending $1.4 trillion more than what they’re collecting in taxes. And that’s just for this year.

Where are they getting the difference? They’re borrowing it, adding to the massive and ever-growing debt of the federal government. How is that debt going to be paid off? By American taxpayers. Your individual, average share as of right now is about $40,000. It’s growing every day because the feds are running up your credit card, which has no limit.

So, Bunning blocks a welfare bill on the ground that the federal government shouldn’t be borrowing any more money. If it can’t afford to be providing the welfare, Bunning said, then it shouldn’t be spending more money.

The statist crowd went ballistic. The attacks were the standard ones whenever anyone objects to any welfare state scheme: “He’s selfish, self-centered, and greedy. He hates the poor and loves the rich. He’s just grandstanding. The bill is only a small percentage of total spending and so it doesn’t make any difference in the larger scheme of things.”

But the statist reaction to Bunning’s move goes much deeper than that and is a perfect reflection of what the socialistic welfare state has done to the American people. Having been born and raised under the welfare state, American recipients of welfare largess, including those on Social Security, Medicare, Medicaid, unemployment, education grants, mortgage guarantees, and bailout and stimulus monies, honestly believe that they are entitled to continue receiving it for as long as they “need” the money.

That’s why they call much of this junk an “entitlement.” What the entitlement crowd is saying is: “I am entitled to your money because I want it and I need it. If you object, my statist associates and I will go on the attack against you and expose you for being a vicious, no-good, selfish hater of the poor and lover of the rich.”

This is what the welfare state has done to America. It has produced a real war among the American people — between those who produce and own their wealth and those who are trying to get their hands on other people’s money through the force of the state. The nineteenth century French legislator Frederic Bastiat put it well when he indicated that under the welfare state, the government becomes a great fiction by which some people try to live at the expense of other people.

Almost as bad has been what the welfare state has done to the mindsets of the American people. It has made so many Americans dependent on the government, not just financially but also emotionally and psychologically. People are on the dole have convinced themselves that they could never survive without their dole. And they absolutely freak out whenever someone talks about ending their dole. Even worse, they look upon the government as their daddy or, even worse, as a beloved deity.

What is happening, not only here in the United States but in Greece, Portugal, Spain, England, and other welfare state countries, is that there isn’t enough wealth among the taxpayers to plunder to fund the massive, ever-growing number of people on the dole.

Meanwhile, panicky over the potential crack up of the welfare state, liberals are blaming the economic woes on “freedom, deregulation, greed, the bankers, and free enterprise,” and they’re proposing their standard statist solution — more socialism and Keynesianism. They’re saying that the feds should just keep spending, spending, and spending, no matter how much they have to borrow or inflate to do so. The notion is that more spending will put unemployed people back to work, whose taxes can then fund the voracious and ever-growing wants of the parasitic sector of society.

But as we libertarians have been saying for decades, ultimately the welfare state house of cards is going to crack apart, just as it did in Cuba and the Soviet Union. God has created a consistent universe, one in which immoral means will beget bad ends. The crack up has obviously already begun in such heavy-duty welfare state countries as Greece, Portugal, Spain, and England, where the base of wealth to plunder and loot is more limited than it is in the United States.

But even here in the United States there is a limit to how much socialism the private sector can bear. And don’t forget: there is always the possibility that those who are being plundered and looted might just decide to go on strike, refusing to produce any more wealth and just “shrugging.”

This story first appeared on Hornberger’s Blog, The Future of Freedom Foundation, March 4, 2010.

You Must Sacrifice

In an article entitled “We The Problem,” Evan Thomas, editor at Newsweek, is trying to establish what’s wrong with his country. The problem isn’t the political system, he writes. “It’s us.”

For decades now, Americans have lived “as if there is no tomorrow,” according to Thomas. “They have racked up personal debt, spending more than they save and borrowing heavily.” People have grown fatter; their sexual morals have loosened; “self-restraint and self-denial are antiquated values.”

Thomas traces the problem back to the 1960s. “The triumph of individual and civil rights,” he claims, “was too often perverted into an ‘I got my rights’ sense of victimhood.” This “got mine” culture of entitlement has paralyzed politicians who won’t dare “asking their constituents to make short-term sacrifices for long-term rewards.”

Appearing on MSNBC’s Morning Joe on March 1, Thomas added that the United States is now a “selfish country.” People are only thinking of themselves, lack any sense of personal responsibility while their leaders are afraid to demand the sacrifices that are necessary.

To an extent, Thomas is right. Americans — indeed, Westerners in general — are much infested with an entitlement mentality, believing that government (which means, other people) is responsible for their wellbeing. Unfortunately, he confuses the causes of the phenomena and therefore prescribes the wrong treatment.

Not the rise of individualism but the growing pervasiveness of collectivism is to blame. Social security, Medicare, Medicaid, employer-based insurance, unemployment benefits; they all stem from a collectivist ethos that frees people of personal worry but denies them personal choice in the name of society.

Thomas misinterprets a misguided, and immoral, notion of righteousness for selfishness. He longs for the times when people “realized that they had to sacrifice a little bit for” — what? Thomas doesn’t say, but it doesn’t matter. Whether it is “society”, “the common good”, “their fellow men”, the rationale is the same: that people must not think of themselves but surrender in substance and in virtue in favor of others. Left to their own devices, these selfish souls will only attempt to satisfy their most primal of instincts; get themselves fat, in the red and sleep around with similarly unenlightened creatures. No, best to give more of your money to the politicians who, as Thomas puts it, “have always been cowards.”

The contradictions in Thomas’ argument are rampant. His very premise is flawed. No matter his disapproval of consumerism, the pursuit of rational self-interest is moral and individual liberties exist because it is. Man is no sacrificial animal with unchosen obligations toward others. “The casting off of conformity and explosion of free expression” did not contribute to peoples’ impetuous claims to the charity of others; it did give rise, in smaller circles, to the sort of paternalistic disdain as expressed by Thomas who tut-tuts as he sees people living to the fullest.

The entitlement mentality is the real problem. Raising taxes and making people pay all the more for the mistakes of their leaders is no justifiable option. Cutting social security programs is the only way to restore peoples’ sense of personal responsibility.

Paul Ryan’s Free-Market Crusade

As today’s Republican Party appears without direction, few among the opposition’s lawmakers remember the free-market principles once so staunchly defended by conservatives. It was a Republican president who gravely extended government’s interference with the housing market and it was a Republican administration that initiated the massive Wall Street bailouts which represented the single greatest distortion of American free enterprise since the New Deal.

There is however one GOP congressman who did what none of his colleagues dared — design a plan to control long-term government spending and deficits. Representative Paul Ryan of Wisconsin proposes to freeze domestic discretionary spending, privatize Social Security and turn Medicare into a voucher program that depreciates against medical costs.

Ryan, who serves as the ranking member on the House Budget Committee, found himself denounced by fellow Republicans. The reason? Ryan is an admirer of Ayn Rand’s free-market philosophy and reportedly requires staffers and interns to read her novel Atlas Shrugged (1957). In a speech before the Conservative Political Action Conference in February of last year, he even warned that some of the Democrats’ initiatives sound eerily similar to the collectivist measures enacted in Rand’s novel. “Citizens who had governed themselves will become mere subjects of the state,” he said, “more concerned about security than liberty. Once we reach this ‘tipping point,’ the friends of freedom will be reduced to silence.”

This sort of rhetoric is apparently considered controversial even by Republican standards. Before moving on to his critics however, a quick look at Ryan’s precise budget proposals is in order.

The Wisconsinite intends to largely privatize Social Security for those who are under the age of 55 by 2011. For citizens over that age, the program would remain unchanged. His alternative is to establish individual investment accounts, funded with part of peoples’ payroll taxes and protected against inflation by a government guarantee.

Medicare would be similarly dismantled if Ryan had his way. Current recipients and those enrolling over the next ten years could continue to enjoy today’s program whereas in 2021, the system would become voucher-based for new recipients. With their vouches, people could buy Medicare-certified, private insurance.

“Rather than depending on government for your retirement and health security, I propose to empower people to become much more self dependent for such things in life,” explained Ryan in a speech to the Hudson Institute last June.

His budget further involves a simplification of taxes, with people able to choose between either the existing system or his alternative which includes no deductions and virtually no special tax breaks. Above a taxfree amount ($39,000 for a family of four), taxpayers would know only two rates: 10 percent up to $100,000 for joint filers and 25 percent on incomes over that.

Critics are positively infuriated. While Republicans have been reluctant to admit support for Ryan’s proposals, economist Paul Krugman believes that his vision “does, in fact, represent what the GOP would try to do if it returns to power.” Ryan’s economic agenda, claims Krugman, “hasn’t changed one iota in response to the economic failures of the Bush years.” The opposite is true — Ryan is trying to steer his party toward the promotion of free-market capitalism once again after President George W. Bush not only expanded government but left the country in serious debt.

Krugman’s response to the proposed dismantling of Medicare is all the more revealing. Where on February 1, he complained that the Republican Party “literally has no ideas about how the nation should actually be governed,” in his bashing of Ryan, the New York Times columnist describes the one plan that is distinctly different from anything the Democrats offer as “deliberately confusing gobbledygook.”

Younger people wouldn’t be covered by Medicare as it now exists, cries Krugman. Instead, they “would receive vouchers and be told to buy their own insurance.” What could possibly be more gruesome? Surely, you can’t expect of people that they take care of their own insurance! That, apparently, is much too confusing.

Jonathan Chait, editor at The New Republic, closes ranks on the left by blaming both Rand and Ryan for their supposed “inability to grasp the enormous differences between American liberalism and socialism or communism, seeing them as variants on the same basic theme. The historical reality,” according to Chait, “is that the architects of American liberalism saw it as a bulwark against communism.” Of course, the “historical reality” is that communism didn’t exist at the time American liberalism was framed but this, perhaps, is just such another inability to grasp the obvious.

More significant is the consequence of this alleged confusion on the part of those who champion the free market however. “The result is a tendency to see even modest efforts to sand off the roughest edges of capitalism in order to make free markets work for all Americans as the opening salvo of a vast and endless assault upon the market system.” Chait leaves readers with the impression that this sort of thinking is nothing short of lunacy.

Ryan’s proposed reforms of Medicare and Social Security aren’t actually so radical as Krugman and Chait would have us believe. He still sees a role for government which is certainly not what Ayn Rand favored. What’s more, both entitlement programs are by no means “modest efforts” in response to alleged shortcomings of capitalism — they rank among the greatest expenses of government and are, in part, responsible for the high costs of health insurance in the United States.

Upon closer scrutiny, Chait’s argument falls apart entirely for it follows the familiar logic of those who vain to speak in favor of free-market capitalism but really forward its undoing. Chait defends the correction of just the “roughest edges” of capitalism; the “excesses” of laissez-faire so commonly persecuted these days. The charge rests on the premise that in order for the free market to work best, it needs to be less free. The inevitable result of “making it work” for everyone, is that everyone has to make do with less.

Paul Ryan’s plan deserves attention for it is without doubt the boldest and forward looking the GOP has offered since the Democrats most recently assumed power. Republicans hesitate however because Ayn Rand seems such an easy target for critics to shoot at. Indeed, Rand herself and blatant misrepresentations of her philosophy are often denounced yet her ideas are hardly ever specifically assessed, let alone undermined. Ryan has adopted just part of her thought to plan for America’s future. Legislators of both parties ought to pay attention.

David Cameron and the British Welfare State

The Conservative Party in Britain has never been a fan of anything that reeks of socialism. But with David Cameron, it takes on something of a new attitude toward it.

In a speech delivered earlier this month, party leader Cameron admitted that social policies enacted since the Second World War have benefited lots of people: inequality has decreased while access to education and health care is now near universal.

At the same time, people seem to feel less responsible for their own lives and because of that lack of responsibility, they are less inclined to contribute to society voluntarily. “As the state continued to expand, it took away from people more and more things that they should and could be doing for themselves, their families and their neighbors,” said Cameron. Read more “David Cameron and the British Welfare State”